Sanchayita Lahkar

The High Court of Delhi, Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that mere correction of a typographical error in an arbitral award does not extend the limitation period for filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996. The case arose from a dispute concerning the supply and installation of a brewery plant. The Court clarified that the limitation period commences from the date of disposal of an application under Section 33 of the Act, not from the date when a signed or corrected copy of the award is received by the party.

The dispute arose from an agreement between the appellant, a company engaged in brewery operations, and the respondent, a supplier of brewery plants, for the establishment of a brewery unit at Himachal Pradesh. The contract, executed in March 2005, covered supply, erection, and commissioning of the plant for an agreed consideration. Disagreements developed over payments, delivery of goods, sales tax liability, transportation charges, and interest. The respondent initiated arbitration, raising several monetary claims relating to unpaid dues, sales tax forms, and associated costs. The appellant filed counterclaims regarding alleged deficiencies and excess payments.

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A sole arbitrator adjudicated the matter and issued an award in October 2017 allowing certain claims and counterclaims. Subsequently, an application was filed under Section 33 of the Arbitration and Conciliation Act, 1996, seeking corrections and an additional award for certain claims not adjudicated. The arbitrator passed an additional award in May 2018 granting the respondent a further amount. A typographical error in the stated amount was later corrected by email communication between the arbitrator and counsels for both parties.

The appellant later filed a petition under Section 34 of the Arbitration Act challenging both the main and additional awards. It contended that the limitation period should be computed from the date of receipt of the signed corrected award, asserting that the earlier correction amounted to a suo motu act requiring formal notice and service of a signed copy. The respondent maintained that the correction was merely clerical, made upon notice, and that the limitation period began from the date the Section 33 application was disposed of.

The parties relied on statutory provisions under Sections 31, 33, and 34 of the Arbitration and Conciliation Act, 1996, and cited various precedents interpreting limitation in arbitral challenges. The dispute centered on whether a minor correction could alter the limitation period for filing objections to the arbitral award.

The Court stated that “the short question that arises in the present appeal is as to from when the limitation would arise for challenging the Arbitral Award under Section 34 of the Act.” After reviewing precedents, the Court reiterated that where a Section 33 application is filed, limitation commences from the date such an application is disposed of.

The Court noted that the arbitrator’s correction on 23 May 2018 was not suo moto but in response to the respondent’s communication regarding a typographical error. “Given the nature of the correction made, the said correction has no impact on the additional award dated 18th May, 2018 and is merely a clerical or typographical error. Hence, the same cannot constitute a suo moto correction,” the Bench recorded.

The Court held, “The said correction was made at the behest of the Respondent who brought the typographical error to the notice of the ld. Arbitrator... Accordingly, this Court is of the view that the said correction was not a suo moto correction.”

The Bench stated that Section 34(3) provides two distinct starting points: one where no Section 33 application is filed, and another where such an application exists. It quoted from previous decisions that “the legislator has clearly indicated two trigger dates for the two situations,” affirming that the second trigger arises upon disposal of the Section 33 application.

The judgment referred to the Supreme Court’s decision in Ved Prakash Mithal & Sons, which clarified that the term “disposed” includes both acceptance and rejection of a Section 33 application, and that limitation runs from the date of such disposal. It further cited the latest judgement in Geojit Financial Services Ltd. v. Sandeep Gurav (2025 SCC OnLine SC 1811), where the Court concluded that “where an application under Section 33 of the 1996 Act has been filed... the starting point for calculation of limitation would be the date of disposal of such application.”

Rejecting the appellant’s reliance on USS Alliance, the Division Bench noted that the precedent applied only to cases involving genuine suo moto corrections by the arbitrator, which was not the situation here. The Court stated, “The submission on behalf of the Appellant that the correction is in the nature of a suo moto correction... would therefore be incorrect.” It added that the correction was a “clerical error” merged into the additional award and could not extend the limitation period.

The Court also observed that accepting the appellant’s contention would defeat the legislative intent behind the strict timelines of arbitration law. “The purpose of fixing strict timelines under the Act would be completely defeated if such submissions are accepted,” the Bench noted, stating that arbitration proceedings must come to finality.

The judgment stated, “The correction of one figure... cannot in any manner extend the limitation period for filing of the petition under Section 34 of the Act.” It found the appellant’s plea “hyper-technical” and inconsistent with the statutory framework.

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It stated that “the receipt of the signed copy of the additional award has no bearing on the limitation,” and reiterated that “in terms of Section 34(3) of the Act, the date of disposal of the application under Section 33 of the Act is when the limitation starts.” The Bench affirmed that even though the corrected copy was emailed on 23 May 2018, the limitation could not be extended to the date of its physical receipt.

“Accordingly, the appeal is dismissed in these terms. Pending applications, if any, are disposed of.” It also recorded that the jurisdiction under Section 37 is limited and does not permit reappraisal of facts or evidence, noting that “if there are two possible views, the view already taken ought to be upheld.” The Court concluded that the appellant’s delay was unjustified and the grounds for extension were “specious.”

Advocates Representing the Parties:
For the Appellant: Mr. Sushil Bajaj, Mr. Bhavook Chauhan, Mr. Amit Sanduja, Ms. Sakshi Singh, and Mr. Tushar Batra, Advocates.
For the Respondent: Mr. Shankar Vaidialingam and Mr. Shivain Vaidialingam, Advocates.

Case Title: M/s Tefcil Breweries Ltd. v. M/s Alfa Laval India Pvt. Ltd.
Neutral Citation: 2025: DHC:8865-DB
Case Number: FAO(OS)(COMM) 37/2025
Bench: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta